August 15th, 2011

The more you drive the more expensive your car insurance is going to be. Here's a closer look at the specific numbers so you can know exactly what you’re getting into.

When it comes commuting, insurance companies are only concerned with mileage, not minutes and hours. So if takes you 55 minutes daily to travel only six miles on a congested highway, you’re in luck (strictly speaking). You’re car insurance rates would be higher if it took you 40 minutes to drive 40 miles.

Transparency is key. If the length of your commute has recently changed -- new job, new office, new living situation, etc -- fill out the form your insurance companies sends periodically regarding alterations to your driving habits. If your commute has gotten shorter, it’s very possible that your premiums will decline. And if your commute has recently lengthened you should still report the change, as your provider could just apply an average to your commuter mileage -- an average which may be even longer than your current commute.

Generally speaking, commuting mileages are tiered in terms of insurance costs. And while different carriers have different policies, below is a helpful framework. Each distance refers to a one-way commute.

Three miles or fewer. Considered pleasure driving, and does not affect your insurance rate.

Four to nine miles. First-tier surcharge. Likely means a few extra dollars folded in to your monthly car insurance rate.

Ten to 15 miles. Second-tier surcharge. Up to five dollars of additional charge folded in to your premium.

Twenty miles or more. Highest surcharge, up to $10 a month extra. The 20-mile mark is the cuttoff. Premium increases almost always stop here. A 45-mile commute should cost as much as a 21-mile commute, insurance-wise.

Obviously, there is not too much you can do about your commute distances, other that switch jobs or relocate closer to the office. And while the distance you travel each day does mean relatively significant swings in your car insurance rates (up to $10 a month either way), it pails in comparison to your paycheck. So while it is important to try to find the best deal on your car insurance when it comes to commuting, you should try to keep the small rate shifts in perspective relative to the totality of your family’s finances when considering where to live and work.

For exact data on how much working from home can help you save on car insurance check out this post on our blog.